Public Plan Would Stifle Innovation. Or, Would It?

HealthLeaders Media Staff, June 10, 2009

Depending on the breadth of a public plan and enrollment numbers, private plans could be either slightly affected or decimated. Private insurers and their supporters are in fighting mode, arguing that a public plan would have an unfair advantage over private insurers and would expand government-run healthcare.

Private insurers' arguments against a public plan are valid, but I think they might have more support from the public and from politicians by taking a different tack. Namely, they should promote the idea that they are grounded in innovation. A number of health insurers recently told me that a public plan could cramp healthcare innovation. Creative thinking in healthcare does not come from the federal government, but through private enterprise, the argument goes.

Private insurers have introduced many healthcare innovations. Robert Zirkelbach, director of strategic communications at AHIP in Washington, DC, says private insurers have spearheaded quality improvements, care coordination, and chronic condition management programs. "Those kinds of things aren't being done in public programs today. A public plan could turn back the clock on all of those initiatives put forth," he says.

Sam Nussbaum, MD, executive vice president and chief medical officer at WellPoint, Inc., in Indianapolis, says programs like bundled payments, pay for performance, and value-based insurance design came from the private sector. In fact, VBID, which was spearheaded by private businesses Marriott and Pitney Bowes, is now featured in legislation that would test the idea in the Medicare population.

"I continue to like the current system with the ability to innovate, to do new things, to experiment with different approaches, and we're going to lose that under this government-directed centralized system," says Nussbaum.